Centre for Health Economics research paper 183, 7 July 2021
- Payments to healthcare providers are often based on the number of patients they treat according to their particular health condition with well-known limitations. Payment based on health outcomes, a form of pay-for-performance, has long been advocated as a possible solution.
- This study adopts a contract theory approach and illustrates how it can inform practical implementation of pay-for-performance schemes that reward health outcomes. The study develops a model that rewards providers for improved health using patient reported outcome measures from hip and knee replacement procedures.
